use faux pas (killtacular) wrote,
use faux pas
killtacular

I solved the deficit!

So, a fun little thing from the new york times is available here. They show the projected deficit for 2015 and for 2030 and give you a bunch of options for reducing spending or raising taxes in order to "solve" the budget. My response is here.

Some of the options are (for me) no-brainers. First up are ones I would plump for even if we were running a surplus, such as raising the cap on payroll taxes, restoring Clinton-era estate taxes, reducing the nuclear arsenal, a carbon tax, reducing US troops in Iraq/Afghanistan to only(!) 30,000 by 2015, and eliminating agricultural subsidies. Only slightly joking, I may well support such proposals even if we just burned whatever money we saved.

Other options also seem eminently reasonable. Its just false that Clinton-era tax policies produced an economic disaster, so I see no problem with rolling back the Bush income and capital gains tax rates. I'm down with a millionaires tax backet, and I just don't believe that the extra 5% marginal rate increase on incomes over a million will do anything to hurt the economy. Modifying the mortgage-interest deduction so it no longer applies to people with mansions and second homes just seems obvious, both as a way to generate more revenue and as a lesson learned from the housing bubble. Finally, reducing troop levels in Europe and Asia, reducing the size of the navy/air force, shrinking the military to pre-Iraq-war-size, and reducing/eliminating some of the new defense company welfare weapons platforms set to come online all seem like reasonable retrenchments.

The remaining options I'm more ambivalent about. "Eliminating pork" seems at first glance to be completely obvious. But aside from anecdotes about bridges to nowhere or whatever, I'm just not sure that such things represent obvious waste as opposed to locally elected congresspeople knowing best what the needs of their constituency are. I'm sure a lot of this is waste, but not how much. So I'm not sure eliminating earmarks is the best way to go. Similarly for reducing government contractors. In general, I think a lot of contracting is simply a way to avoid unionization of government employees and/or a chance for private company profiteering. But, again, I don't really know that much beyond anecdotes, so I could be wrong.

I worry about means-testing social security because it might undermine the programs near-universal approval and lead, in the future, to regressive cuts in benefits for everyone else. As a policy matter, means-testing is solid. As a political matter, I'm not sure. Finally, the "eliminate loopholes" and "bank tax" worry me. They seem plausible as superficially described, but they also seem, well worrisome.

In any case, I overshot the budget deficit by quite a bit (particularly in the short term), so I have extra money to play with! That I would use to offset some of the cuts described above, particularly restoring some of the tax loopholes that are actually worthwhile, restoring some agricultural subsidies, and restoring some military R&D.

So, now, you do better!
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